Behind the scenes at Dixons Carphone's warehouse

Essential Retail takes a tour of the UK warehouse powering Dixons Carphone, learning how the retailer is preparing for peak trading.

Published: 09:00:00 on the 17th Oct 2016Author: Caroline Baldwin

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The Dixons Carphone warehouse on the outskirts of Nottingham is a 750,000 sq-ft operation, covering both store and eCommerce B2C and B2B stock, from the tiniest of SD cards, all the way up to fridge freezers.

Essential Retail had the pleasure of visiting the company's small product warehouse on the site, which can house 35,000 items of stock ranging from memory cards to tablet computers, across its 250,000 sq-foot warehouse.

Don't miss our video interview with operations manager, Gary Hamilton, at the end of the feature.

Totes

Blue boxes, called totes, are constantly moving around the warehouse transporting goods, thanks to the 4.5km of conveyor belts running through the building. There are 50,000 of these totes in the network, either in the warehouse or transporting goods to and from branches. In the warehouse thousands of totes could be travelling metres in the air or hurtling down slides taking products to the correct area of the warehouse to be packed and despatched. Oldman says the conveyors were grid locked during Black Friday and Cyber Monday frenzy last year as 182,287 units made their way through the warehouse.

"This year, we're putting more products in the totes and, it's a little bit like car sharing, each year we make little changes to improve the next peak period," Oldman explains.

A blue tote can fit around 27 units and everything is weighed as the items go through their warehouse journey. If an item has been forgotten, this shows up when the tote is weighed, so a box can be double checked and no orders are missed.

The small product warehouse has four automated cranes assessing which totes need to be where. These cranes move at speed to move stock – both to be picked and to move around the picking area to save time later. The machines can conduct 80-90 movements per hour.

Meanwhile three Very Narrow Aisle (VNA) trucks work at the Dixons Carphone warehouse to reach the height of 12 metres to pick products.

The barcode on the invoice connects to Metapack and applies the appropriate label on the base of the box. Cling film is then applied and it travels through a 187 degree heat machine to seal. The automated packing machine was introduced to the warehouse five years ago and on average packs 250 items per hour, rising to 300-320 per hour during peak trading. Debra Wilson, senior operations manager, says the automation helps the business deal with Black Friday, especially as Dixons Carphone is expecting a 24% increase in small box online orders this year.

In addition to the automated packing machine, the warehouse also has around 24 manual packing benches, which increases to 48 during peak trading. Considerably slower, these benches can process 38 units per hour and are in operation 24-hours a day during peak trading.

PC World Business

Ten per cent of Dixons Carphone turnover is from its B2B PC World Business division, the company experiences peak trading twice a year, firstly at the end of the tax year around February and March, and secondly around Christmas, with the latter gaining more traction due the consumer event, Black Friday. At Christmas the B2B business deals with companies who want to buy gifts for their staff, which has to be organised further in advance than B2C Christmas purchases.

Peak

The warehouse employs around 50 workers, but during peak trading before Christmas this figure rises to around 400. Operations manager, Gary Hamilton, says the warehouse feels the beginning of what he calls the "peak hurricane" towards the end of October and beginning of November.

Over the Black Friday weekend, the company keeps momentum going by hiring a DJ in its warehouse and encouraging fancy dress.

"We're asking a lot from people over those five days," says Wilson, adding that last year the company offered bacon rolls, a sweet trolley and hourly prizes, such as Beats Headphones, to the best employees.

Since the 2014 merger of Dixons Retail and Carphone Warehouse, the warehouse has had to accommodate space for the mobile phone retailer. Luckily the Carphone Warehouse side of the business is not impacted by Black Friday and Christmas peak as much as Dixons – its busy period is mainly around the launch of the latest handset, such as the iPhone. During peak trading, the space and resources given to Carphone Warehouse can be utilised by the rest of the business. Wilson says the company has to be inventive when challenged with space.